The Price Rate of Change (PROC) is a momentum indicator that helps forex traders measure the speed of price movement and trend strength. In this guide, we’ll explore how PROC works, its advantages, and the best strategies to trade with it effectively.
The Price Rate of Change (PROC) is a momentum-based indicator that measures the percentage change in price over a selected period. It helps traders determine whether price momentum is accelerating or slowing down, making it useful for trend confirmation and reversals.
The PROC formula is:
PROC = [(Current Price – Price n Periods Ago) / Price n Periods Ago] × 100
Where:
PROC can confirm whether a trend has strong momentum:
Recommended Settings:
PROC can identify overextended market conditions:
Divergence between price and PROC can signal potential reversals:
Pairing PROC with a moving average (e.g., 50 EMA) improves trade confirmation:
✅ Pros:
❌ Cons:
The Price Rate of Change (PROC) is a valuable momentum indicator that helps traders assess trend strength, identify reversals, and measure price acceleration. When combined with other technical tools, PROC enhances trade accuracy and decision-making.
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Trading over-the-counter derivatives involves leverage and carries significant risk to your capital. These instruments are not appropriate for all investors and could result in losses exceeding your original investment. You do not possess ownership or rights to the underlying assets. Always ensure you are trading with funds you can afford to lose.